Posts Tagged: "Licensing"

A close examination of SEP databases reveals that a large number of patents that have been declared SEPs are not essential…. Patent owners are obliged to declare the patent as essential even if they are doubtful about its essentiality. Unfortunately, a few patent owners may intentionally proclaim many of their patents to be essential to gain benefits or a business advantage. In practice, there are multiple reasons potentially essential patents and patent applications might be rendered non-essential. For example, a patent could be granted with amendments that cause it to be no longer essential. Whenever implementers bargain for the licensing fees, they must examine whether certain patents are actually essential, which can stall negotiations and lead to litigation.

In a major 2018 speech, Justice Department Assistant Attorney General for Antitrust Makan Delrahim enunciated a “New Madison Approach” (NMA) (a tribute to James Madison’s support for a strong patent system) designed to restore greater respect for efficiency-seeking patent transactions in antitrust enforcement (a 2020 law journal commentary discusses the NMA and the reactions it has elicited, both positive and negative). Consistent with the NMA, the Trump Administration Antitrust Division took a number of initiatives aimed at reducing perceived new antitrust risks associated with widely employed patent licensing practices (particularly those touching on standardization). Those new risks stemmed from Obama Administration pronouncements that seemed to denigrate patent rights, in the eyes of patent system proponents (see here, for example). Given this history, the fate (at least in the short term) of the NMA appears at best uncertain, as the new Biden Administration reevaluates the merits of specific Trump policies. Thus, a review of the NMA and the specific U.S. policy changes it engendered is especially timely. Those changes, seen broadly, began a process that accorded greater freedom to patent holders to obtain appropriate returns to their innovations through efficient licensing practices – practices that tend to promote the dissemination of new and improved technologies throughout the economy and concomitant economic welfare enhancement.   

Senator Jim Inhofe (R-OK) yesterday introduced the “Protecting American Innovation and Development (PAID) Act of 2021,” a bill that would give the U.S. Department of Commerce authority to hold accountable bad-actor Chinese companies that refuse to pay licensing and royalty fees to free-market developers of wireless technologies. Covered by standard essential patents (SEPs).

Since launching Petition.ai’s searchable database of publicly available patent petition documents filed with the United States Patent and Trademark Office (USPTO), the most searched petition type, by far, is for a Retroactive Foreign Filing License (RFFL). Anecdotally, patent practitioners believe it is difficult, if not almost impossible, to obtain a RFFL. However, while the process may take a long time and may require several petitions, our analysis shows requests for RFFLs are often granted, eventually. A future article will examine the most common reasons why RFFL petitions are dismissed. Finally, our research uncovered some troubling issues with the substantial number of the granted petition decisions not available for public review.

In Part I of this series, the authors reviewed the law behind subsequent patent applications. In Part II, we reviewed the different types of subsequent applications. Part III discussed some of the implications of these for prosecution and litigation, and Part IV will examine some further implications. In the fifth and final installment in this series, we will distill all of the information covered to provide concrete practice tips for practitioners.

This is the fifth and final article in a series of articles analyzing statements made by various entities in the cellular industry regarding licensing Standard Essential Patents (SEPs) on a Fair, Reasonable and Non-Discriminatory (FRAND) basis. The fourth article focused on the obligations of SEP owners in the process of FRAND licensing. This article considers the obligations of implementers.

A wave of thousands of 5G Self-Declared Standard Essential Patents (SD-SEPs) applicable to everything from devices to network infrastructure is fast approaching. The value of these patents is 6-10% of the retail product value, if recent LTE SEPs court decisions are to be believed. However, ex ante 5G licensing rates announced by traditional licensors Qualcomm, Ericsson, Nokia, and Interdigital total around $18 (or 3.6%) on a $500 handset. Yet these licensors hold less than 17.4% of the relevant 5G SD-SEP families, which would make the total royalty burden 20% or higher. Implementers faced with high SEP licensing cost and uncertainty typically mitigate risk by: (1) using licensed components, (2) receiving indemnification, and (3) leveraging defensive portfolios. But there is another strategy that should be considered given the tools which are now available: preemptively challenging patent family validity in foreign jurisdictions that are relatively quick, inexpensive and often more effective.

During a recent panel discussion at IP Watchdog’s SEP 2020 Conference, a question arose as to the difference, if any, between a reasonable royalty for infringement of a U.S. patent and a fair, reasonable and non-discriminatory (FRAND) rate for licensing standards essential patents (SEPs). The following discusses this question and highlights some recent related judicial developments. According to an article titled “The Effect of FRAND Commitments on Patent Remedies”, appearing in the Utah Law Faculty Scholarship (hereinafter “Contreas et al.”), “there appears to be nothing in U.S. law that compels courts to utilize either the Georgia-Pacific framework, or patent damages law in general, to determine royalties complying with an SEP holder’s FRAND commitment”. The authors further note that “these two concepts (patent damages and FRAND royalty rates) arose via different historical pathways and are intended to achieve different goals”; the former being rooted in statutes and case law, the latter being contractual in origin.

This is the fourth in a series of articles analyzing statements made by various entities in the cellular industry regarding licensing Standard Essential Patents (SEPs) on a Fair, Reasonable and Non-Discriminatory (FRAND) basis. The third article considered the royalty base to which FRAND rates apply. This article focuses on statements made regarding the obligations of SEP owners in the process of FRAND licensing.

How many people or organizations could undergo an exhaustive investigation into everything they’ve done over the past 30 years and emerge unscathed? That’s what just happened to the technology transfer operations at the Department of Health and Human Services (HHS), with the spotlight primarily focused on the National Institutes of Health (NIH). Of course, an exercise like this has to find something, so the report that resulted from this exercise is titled “NIH Should Publicly Report More Information about the Licensing of Its Intellectual Property”. After extensive digging, all it uncovered are some pretty small potatoes.

Patent owners often obtain patents to protect products, as well as complementary products or use cases associated with those products. However, when selling or licensing the patented products, a patent owner may inadvertently extinguish potential revenue streams associated with the complementary use cases due to the doctrine of patent exhaustion. Patent exhaustion follows the basic idea that if a company sells or licenses a patented product to a buyer, the company cannot sue the buyer (or a third party that the buyer provides the patented product to under the license) for patent infringement for using the product. Patent owners should take care when preparing and licensing patents to ensure that infringement claims for complementary products or use cases associated with patented products are not exhausted by the sale or licensing of the patented products, as shown by the Federal Circuit case of Helferich Patent Licensing v. New York Times, 778 F.3D 1293 (Fed. Cir. 2015).

On November 19, the Federal Circuit issued a precedential decision in Vectura Limited v. GlaxoSmithKline LLC in which the court affirmed a judgment entered against GSK finding that Ellipta-brand inhalers infringed patent claims asserted by Vectura. On appeal, GSK had argued that it was entitled to new trials on infringement and damages, but the Federal Circuit disagreed.

The conversation begins, “Can you keep a secret?” “Yes, of course,” they say. What happens next? Naturally, you tell them what it is that you are going to trust them with. That’s the way it happens in personal relationships. In business, it’s usually more complicated. And it depends a lot on who you’re talking to. Let’s first consider the employee confidentiality agreement. In some smaller businesses, especially in the “low tech” economy, employee non-disclosure agreements (NDAs) may not be necessary, because workers neither create nor are they exposed to company secrets. But if you’re making things from a private recipe, or if employees learn sensitive information about customers, it’s a good idea to have these contracts. And if you’re in a knowledge-based industry, they’re more or less essential.

This is the third in a series of articles analyzing statements made by various entities in the cellular industry regarding licensing Standard Essential Patents (SEPs) on a Fair, Reasonable and Non-Discriminatory (FRAND) basis. The previous article considered unconditional offers to license on a FRAND basis, arbitration of FRAND terms and conditions, specific FRAND rates, the application of such rates, and portfolio licensing. This article focuses on statements regarding the FRAND royalty base.

With a worldwide pandemic, a gyrating economy, an erratic stock market, turmoil in many of America’s largest cities and a high-stakes election, 2020 has been a tumultuous year. Apart from the obvious anxiety they cause, such events may trigger force majeure clauses in joint-development agreements and licensing agreements. To what extent should licensees compensate licensors who terminate licensing agreements based on instances of force majeure?